H&M India eyes Rs 2,000-cr turnover, likely to maintain 40% growth rate

The world’s second-largest fashion retailer Hennes & Mauritz (H&M) is targeting Rs 2,000 crore in turnover from India, its fastest-growing emerging market, Janne Einola, country head of H&M India, said.

The retailer, which competes globally with Inditex’s Zara, the world’s largest fashion company, is likely to achieve the target by the end of this calendar year (CY), Einola said, driven by a greater online and offline push, local collaborations and affordable merchandise. H&M follows a December to November accounting year. It has 47 stores in India.

H&M, said retail experts, would maintain its over 40 per cent rate of growth in terms of sales for 2020, coming at a time when there is a domestic consumption slowdown.

Last year, H&M had grown top line at the rate of 43 per cent per annum, touching Rs 1,490 crore, Einola said, ahead of the 29 per cent top line growth it had achieved in 2018.

Inditex, which has a joint venture (JV) with Trent in India, runs 22 Zara stores here. The JV had achieved a top line of Rs 1,438 crore in FY19, growing at 17 per cent per annum, lower than the 19 per cent top line growth clocked in FY18. Inditex Trent follows an April-March accounting year.

While Zara, too, has been pushing affordable collections within its stores, revamping its line-up from time to time and tapping the online medium to drive sales, experts said H&M would widen the sales gap with the former, if it touches the Rs 2,000-crore-mark this calendar year. Inditex Trent is yet to disclose its FY20 financial numbers. Currently, H&M has a small lead over Zara in terms of sales.

Einola said the company was raising its India bet this year, targeting tier-II and -III markets apart from tier-I cities to set up its stores. The retailer proposes to add 5 to 10 stores this year, taking its total store count to over 50. The retailer had earlier committed Rs 700 crore to set up 50 stores in India.

The company may also diversify into areas such as home furnishings, beauty, sports retail, starting with the home segment as early as possible, he said, while adding that beauty, and sports retail will come later.

The firm will also launch a Sabyasachi Mukherjee collection in April, including western and Indian wear such as saris. 

This is the first time that Indian wear will be available at H&M outlets in the country, as it taps local needs and preferences. The western wear in Mukherjee’s stable will be taken to global markets, including the UK, France and the US this year, Einola said.

The company will also launch its loyalty programme in India as it looks to drive sales in the country. The online partnership with Myntra, which happened in August 2019, will be deepened this year, Einola added.